Correlation Between Huhtamaki Oyj and Robit Oyj

Can any of the company-specific risk be diversified away by investing in both Huhtamaki Oyj and Robit Oyj at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Huhtamaki Oyj and Robit Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Huhtamaki Oyj and Robit Oyj, you can compare the effects of market volatilities on Huhtamaki Oyj and Robit Oyj and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Huhtamaki Oyj with a short position of Robit Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huhtamaki Oyj and Robit Oyj.

Diversification Opportunities for Huhtamaki Oyj and Robit Oyj

-0.07

Correlation Coefficient

Huhtamaki Oyj  Robit Oyj

Good diversification

The 3 months correlation between Huhtamaki and Robit is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Huhtamaki Oyj and Robit Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Robit Oyj and Huhtamaki Oyj is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Huhtamaki Oyj are associated (or correlated) with Robit Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Robit Oyj has no effect on the direction of Huhtamaki Oyj i.e., Huhtamaki Oyj and Robit Oyj go up and down completely randomly.

Pair Corralation between Huhtamaki Oyj and Robit Oyj

Assuming the 90 days trading horizon Huhtamaki Oyj is expected to under-perform the Robit Oyj. But the stock apears to be less risky and, when comparing its historical volatility, Huhtamaki Oyj is 2.29 times less risky than Robit Oyj. The stock trades about -0.15 of its potential returns per unit of risk. The Robit Oyj is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  161.00  in Robit Oyj on January 31, 2024 and sell it today you would earn a total of  17.00  from holding Robit Oyj or generate 10.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Huhtamaki Oyj  vs.  Robit Oyj

Huhtamaki Oyj

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Huhtamaki Oyj are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Huhtamaki Oyj is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Robit Oyj

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Robit Oyj are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Robit Oyj demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Huhtamaki Oyj and Robit Oyj

The main advantage of trading using opposite Huhtamaki Oyj and Robit Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huhtamaki Oyj position performs unexpectedly, Robit Oyj can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Robit Oyj will offset losses from the drop in Robit Oyj's long position.

The idea behind Huhtamaki Oyj and Robit Oyj pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.